(The following statement was released by the rating agency)
LONDON, August 01 (Fitch) Fitch Ratings has revised the Outlook
of SNS Bank
N.V.'s (SNS, BBB+/Negative/F2) EUR4.4bn equivalent mortgage
covered bonds to
Stable from Negative and affirmed their rating at 'AA+'.
The Outlook revision reflects an increase in the IDR uplift to
'2' from '1'.
This follows the classification of SNS as systemically important
by the Dutch
Central Bank (DNB) because of its interconnectedness within the
financial system
and its market share in savings and mortgages in The
Netherlands. The IDR uplift
reflects Fitch's view on the greater motivation for alternative
resolution tools
to be applied to SNS other than liquidation and the level of
senior unsecured
debt to total adjusted assets in excess of 5% in place,
providing a buffer for
covered bondholders should equity and junior instruments prove
insufficient to
absorb losses.
The Stable Outlook on the covered bonds is despite the Negative
Outlook on SNS's
IDR. This is because Fitch expects the IDR uplift of '2' on the
programme to
offset a potential downgrade of SNS's IDR to its current
Viability Rating of
'bbb-' as a result of a weakening of state support.
KEY RATING DRIVERS
The key rating drivers remain unchanged since the programme's
review on 2 July
2014. The rating is based on SNS Bank's Long-term Issuer Default
Rating (IDR) of
'BBB+', the increased IDR uplift of '2', a Discontinuity Cap
(D-Cap) of 4
(moderate risk) and an asset percentage (AP) of 75% that the
issuer commits to
in the asset coverage test in its investor report, the same
level as the 'AA+'
breakeven AP.
RATING SENSITIVITIES
The 'AA+' rating would be vulnerable to downgrade if any of the
following
occurs: (i) the IDR is downgraded by three or more notches to
'BB+' or below; or
(ii) the number of notches represented by the IDR uplift and the
D-Cap is
reduced to 5 or lower; or (iii) the AP that Fitch considers in
its analysis
increases above Fitch's 'AA+' breakeven level of 75%.
The Fitch breakeven AP for the covered bond rating will be
affected, amongst
others, by the profile of the cover assets relative to
outstanding covered
bonds, which can change over time, even in the absence of new
issuance.
Therefore the breakeven AP to maintain the covered bond rating
cannot be assumed
to remain stable over time.
More details on the portfolio and Fitch's analysis will be
available in a full
rating report, which will shortly be available at
www.fitchratings.com.
Contacts:
Primary Analyst
Kevin Vanistendael
Analyst
+44 20 3530 1564
Fitch Ratings Limited
30 North Colonnade
London E14 5GN
Secondary Analyst
Stephen Kemmy
Director
+44 20 3530 1474
Committee Chairperson
Cosme de Montpellier
Senior Director
+44 20 3530 1407
Media Relations: Christian Giesen, Frankfurt am Main, Tel: +49
69 768076 232,
Email: christian.giesen@fitchratings.com.
Additional information is available on www.fitchratings.com.
Applicable criteria, 'Covered Bonds Rating Criteria', dated 10
March 2014,
'Counterparty Criteria for Structured Finance and Covered
Bonds', dated 14 May
2014, 'Covered Bond Rating Criteria - Mortgage Liquidity and
Refinance Stress
Addendum' dated 4 February 2014, 'EMEA Residential Mortgage Loss
Criteria',
dated 28 May 2014, 'Criteria Addendum: Netherlands', dated 3
June 2014 are
available on www.fitchratings.com.
Applicable Criteria and Related Research:
Covered Bonds Rating Criteria
here
Counterparty Criteria for Structured Finance and Covered Bonds
here
Covered Bonds Rating Criteria - Mortgage Liquidity and Refinance
Stress Addendum
here
EMEA Residential Mortgage Loss Criteria
here
Criteria Addendum: Netherlands - Residential Mortgage Loss and
Cash Flow
Assumptions
here
Additional Disclosure
Solicitation Status
here
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